Posted on Leave a comment

Shelby County Tax Auction Will be Online 4/1/20

Because of COVID-19, the Shelby County, Alabama, tax auction will take place online, rather than at the county courthouse. It will still be on the same scheduled date, April 1, 2020. Remember, Shelby County switched to a lien auction system last year, and will be doing lien auctions again. For more information, visit www.govease.com (the company that will be hosting the auction platform) or Shelby County’s website at https://ptc.shelbyal.com/caportal_mainpage.aspx

As of 2:00 pm on March 23, I don’t see any links for the Shelby County auction, but continue monitoring those two sites. You will need to register at govease.com, so do that as soon as possible. They also have some online training videos that are free, about the online auction process.

Posted on Leave a comment

Mobile County Online Tax Lien Auction

Mobile County has now set its auction date. It will be an online lien auction on May 4, 2020. For more information, registration, and training, click HERE. The company hosting the auction is based in Mississippi, and has done online tax auctions for that state and for Tennessee. Hopefully that means everything will run smoothly.

If the link above does not work, copy and paste the following into your browser: https://govease.helpscoutdocs.com/article/97-alabama-tax-lien-auction-overview

Remember, this is a tax LIEN auction, not the old-fashioned tax certificate auction. There will be no rights of possession, no ability to make improvements, but also a much shorter and easier path to clear title with the ability to get title insurance. If you are unclear about the differences, and how that affects your strategies, think about signing up for our Intro to Tax Sales class, HERE. Even if you’ve taken it before, a LOT has changed in the last couple of years: some bad things, some great things, and some new opportunities.

Posted on 2 Comments

Inheriting a Tax Certificate

The email question asked, “My mother owned several tax certificates. She died last year. In her will, she left her entire estate to me. Does that give me the tax certificates, and allow me to get tax deeds? The local probate judge says I cannot get deeds unless I have a written assignment of the certificates. The judge says the will does not qualify as an assignment. Is that right?”

As a starting point, the statutes are very clear that tax certificates can be assigned “in writing or by endorsement.” An endorsement is like endorsing a check. You remember checks, don’t you? Of course, a written assignment on a separate piece of paper is always safest, though.

But, what about a will? Does that qualify? For over one hundred years, Alabama courts and Attorney General opinions said, “No.” Then, in 2012, someone asked, again, for an Attorney General’s opinion on the subject. Government officials can ask for an AG opinion about something related to their job. Not you or me, though. Don’t get your hopes up about free legal advice.

The AG’s opinion, Number 2012-012, says the Alabama Supreme Court decision that started all the trouble ACTUALLY said something different than what everybody thought. That’s not uncommon, by the way. Those old 1800’s decisions are really hard to read. Some people don’t even try. They rely on Headnotes, which are kind of a “cheat sheet synopsis” of the court opinion.

The AG said that when you read the entire decision and all of the facts, it was clear the Supreme Court said the local probate judge could not issue a deed to someone because they were not an actual heir, NOT because heirs could not inherit tax certificates under a will.

As a result, the AG revoked all of its prior opinions that relied on that decision. The opinion says, “Yes, you can inherit a tax certificate under a will, and receive a tax deed.”

Of course, that leaves open the question of what happens if someone dies without a will. Nobody knows, for sure. Maybe probate will have to be opened. Let’s hope this issue never comes up for any of you!

Posted on Leave a comment

Big Changes for 2020

What is 2020 bringing for Alabama tax sale investors? Lots of changes!

Interest rates are dropping to 8 percent across the board, although that was probably not the intent. Some local redemption offices will still allow 12% on auctions that occurred before 2020. The rules are quirky.

Payment for improvements will turn into a logistical nightmare, with taxpayers able to regain possession before they pay for improvements. The intended upside for investors was the “sudden death” provision if the taxpayer misses its deadline to pay, but actual implementation at the county level will change that. The best option for everybody? Get the law changed, again!

The Alabama Department of Revenue has plans to break the logjam caused by the ten-fold increase in price requests, the vast majority of which NEVER turn into a purchase.

Birmingham Land Bank will be selling commercial as well as residential properties. Changes to the process will make it easier to buy in 2020. Right now, they have 22 residential properties already in inventory with warranty deeds and title insurance, for immediate closings upon payment of $3,000 to $4,500. More cities are expected to implement their own local Land Banks, including several in Jefferson County.

Mobile County will join Shelby and Baldwin in switching to tax lien sales, as will several of the smaller counties. Mobile plans to have an online auction rather than the traditional method. As of the date of this blog post, it will be the only one for 2020.

An important new appeals court decision means a redeeming owner will have to pay you the reasonable rental value of tax deed property from the deed date up until the date of redemption, on top of the other redemption charges.

FYI, one of the pre-filed bills for the 2020 legislative session seeks to abolish state sales taxes and income taxes and replace them with an 8.03% consumption tax on all goods and services. It doesn’t have anything to do with tax sales, but I though you’d like to know about it!

If you are interested in details about these and other changes, plus explanations of what they mean to you, your strategies, your new opportunities, and your new perils, please attend one of our classes on “2020 Tax Sale Changes.” The class is 4 hours, but every single minute is important! You can attend in Birmingham or Orange Beach, in person or live over the Internet. Streaming video also available. For details and registration links, click HERE.

Posted on 1 Comment

Question of the Week: Indemnity Agreement

This question comes from Mobile County. A tax sale investor wanted to exchange his tax certificate for a tax deed once he passed the three year date. The Probate Judge’s office told him that he would have to sign an indemnity agreement before they would give him the tax deed. They wanted him all tied up with legal documents before they would give him what he was entitled to!

The indemnity agreement said the investor would protect the county from any and all claims related to the tax sale property. In other words, if anyone at all sued the county for anything at all about the tax sale, even claims the sale process was void, the investor would have to pay up!

He asked my opinion, and I told him the ONLY requirement for getting a tax deed was paying a $5 fee. I told him to stand firm, refuse to sign the agreement, and insist on getting a tax deed.

He did exactly that. The Probate Judge’s office backed down and said he was not required to sign the agreement, but they were required to give it to him.

Any such “requirement” is just an internal procedure that has nothing to do with the law. If you are asked to sign anything at all before being given a tax deed or tax certificate, check with an attorney before signing away your life. Just because someone asks for something, doesn’t mean they are entitled to it. Even county officials.